Plans by the Jersey City Economic Development Corporation to keep money flowing to the city’s five commercial districts have been dashed by the U.S. Treasury Department.

This news comes at a time when these commercial districts are being forced to slash services and popular community programs due to funding cuts associated with the state’s phase-out of the Urban Enterprise Zone Program. The news also comes at a time when residents of downtown and the Jersey City Heights have started a letter writing campaign imploring city officials to dedicate more money to the city’s commercial districts.

While the City Council last week approved a $397,049 six-month administrative budget for the Jersey City Economic Development Corporation, which will be effective from July 1 through Dec. 31, the long-term survival of the agency and the programs it supported through the state Urban Enterprise Zone Program is tenuous at best.

Program provided loans, job training

Launched in 1983, the Urban Enterprise Zone Program was started to stimulate the local economies of the state’s once-blighted urban areas. Businesses located in a designated Urban Enterprise Zone could charge a sales tax that is half of the usual state sales. (At present, businesses in Urban Enterprise Zone can charge a sales tax of 3.5 percent.) A portion of this tax money was then returned to the city for local economic development, including capital improvements, and salaries for public safety workers. Through loans, grants, and other resources, Jersey City, like other enterprise zones, used its Urban Enterprise Zone money to attract small businesses, help small businesses get started, assist businesses make improvements, and train residents for jobs. The program has also supported street fairs and farmers’ markets, in addition to business improvement measures and safety initiatives.

For example, Urban Enterprise Zone money that was funneled back to Jersey City has in the past enabled the city to make significant financial contributions to each of its Special Improvement Districts. The SIDs have in turn used this money to finance street fairs like the annual Everything Jersey City Street Festival, outdoor theater events, and other community initiatives that proponents say attract customers and improve business in the city’s commercial districts.

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The Central Avenue Special Improvement District Management Corporation has discontinued its sidewalk sweeping program due to a lack of funding.

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The city also used its Urban Enterprise money for job training programs, loans and grants to small businesses, and closed circuit security cameras in commercial areas.

Statewide, the program has been credited with funding start-up loans to micro-businesses, improving commercial districts, and offering new job skills to unemployed workers since the 1980s.

Two years ago, however, Gov. Christie began to close out the funding portion of the Urban Enterprise Zone Program. Christie and his allies in Trenton have maintained that some of the efforts supported by Urban Enterprise money did not specifically meet the stated goals of the program.

Feds to city: No go

In an effort to salvage some of the work once done through the Urban Enterprise Zone Program, the Jersey City Economic Development Corporation, which administers the city’s Urban Enterprise Zone Program, applied to the federal government last year to become a community development financial institution (CDFI).

Run by the U.S. Department of Treasury, the CDFI Fund allows designated local agencies to use federal money to give loans and other financial support to small businesses that may have difficulty getting loans from conventional banks.

To participate in the program, the Economic Development Corporation first needed to be recognized as a CDFI by the U.S Department of Treasury. Then it could have applied for funding from the federal government.

A CDFI designation would have enabled the city’s Economic Development Corporation to use federal dollars to continue some of the work the agency previously did with Urban Enterprise Zone money from the state. The agency had hoped to restore as much as $2 million in lost Urban Enterprise Zone funding this year.

The city’s CDFI application was, however, rejected by the U.S. Department of Treasury in December, according to officials with the Economic Development Corporation.

“One of the reasons we were given for why we did not receive the CDFI designation was that our governance structure was not considered to be autonomous enough from the city,” Economic Development Corporation CFO Cliff Adams explained to the City Council last week.

Residents: ‘Invest in commercial districts’

The loss of the CDFI designation is another blow to the city’s business districts that are now struggling to make ends meet.

Last month, the Central Avenue Special Improvement District Management Corporation announced that it would discontinue its longstanding sidewalk sweeping program, effective Jan. 28, due to a lack of funding.

The organization has also said it probably will not have the resources to host the annual Everything Jersey City street fair this year.

A group of residents launched a letter writing campaign to pressure the city to find the resources to support the city’s commercial districts. Dozens have thus far signed a form letter that was started last month by the Central Avenue Special Improvement District, which read, in part: “We, the undersigned, demand the City of Jersey City continue to invest in its commercial districts and main street neighborhoods…Funding cuts to Jersey City’s main street areas have negatively affected neighborhoods across the city…Jersey City residents deserve quality main street living. The city’s commercial districts are still the face of city neighborhoods. The importance of their prosperity to property values, better quality of life, and the city’s future growth demand the attention and investment of local government. Main street events like the Everything Jersey City Festival must continue. Economic development must happen beyond Jersey City’s waterfront. Jersey City cannot afford to allow its commercial districts to deteriorate. Economic development resources and taxpayer dollars must be used efficiently in neighborhood main street areas to ensure that Jersey City’s economy expands and diversifies.”